Toshiba to cut 5,000 jobs. Why are layoffs now a trend even in Japan? | World News - Hindustan Times
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Toshiba to cut 5,000 jobs. Why are layoffs now a trend even in Japan?

Apr 17, 2024 08:13 PM IST

Toshiba plans to cut 5,000 jobs in Japan, a move signalling a shift from the country's aversion to layoffs amid labour shortages. \

Toshiba Corp. is reportedly planning to reduce its workforce in Japan by 5,000 employees, amounting to approximately 10 per cent of its total headcount, according to a report by Nikkei. This move signals a departure from Japan's historical aversion to layoffs, reflecting the growing acceptance amid persistent labour shortages in the country.

Toshiba(Reuters)
Toshiba(Reuters)

If implemented, this initiative would mark one of the largest job reduction efforts in Japan this year. The Tokyo-based company aims to streamline its operations by downsizing noncore businesses. As a consequence, Toshiba anticipates incurring a one-time cost of around ¥100 billion ( 5,400 crore), the report said.

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Layoffs in Japan? A rare phenomenon

• Layoffs at Toshiba mark a departure from Japan's tradition of strong worker protection laws, reflecting a trend among blue-chip companies amid a historic labour shortage.

• Factors such as union demands for blanket pay raises, increased worker mobility, and a growing reliance on foreign workers contribute to the changing landscape.

• Several other prominent Japanese firms, including Shiseido Co., Omron Corp., and Konica Minolta Inc., have also announced job cuts in recent months.

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Problems at Toshiba

• Toshiba, once a major employer in Japan, faces ongoing challenges as it seeks to streamline operations and focus on infrastructure and digital technology. Its diverse portfolio includes nuclear turbines, batteries, and quantum computing technologies.

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• The company has a history of management missteps and scandals, including a record penalty for falsifying financial statements in 2015.

• Toshiba's efforts to recover from losses, including the sale of its memory-chip business, have been complicated by issues in its nuclear business.

• Executives have pursued a $15 billion buyout to take the company private, aiming to turn the page on a troubled period in its 149-year history.

(Inputs from Bloomberg)

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